China and America scramble to invest in Cuba’s tourist industry

The American government’s relaxation of its 56-year embargo against Cuba and the inauguration of direct flights from China has triggered a race to invest in the island’s tourist infrastructure.

US hospitality group Marriott International confirmed yesterday that its chief executive, Arne Sorenson, will accompany President Barak Obama on his historic visit to Cuba, which is due to begin on Sunday 20 March.

Marriott, whose brands include Sheraton, Ritz Carlton and the Autograph Collection, is about to become the largest hotel chain the world when it completes its $12.2bn takeover of Starwood Hotels and Resorts later this year.

The company told USA Today it was “optimistic that we are going to get a green light soon from the US government to have hotels under the Marriott flag in Cuba”.

President Obama has resumed diplomatic relations with Cuba and now allows US citizens who fall into 12 categories to travel to the island. Commercial air travel is now permitted, and all major US airlines have applied for permission to begin services.

However, a more comprehensive lifting of the embargo will require legislation in the US congress, which seems unlikely in the immediate future.

The danger for US firms is that Chinese and European investors will beat them to the sun loungers.

There are reports that China’s Suntime International Economic Trading Company will go ahead with a luxury hotel in Havana, in a joint venture Cuba’s state tourism agency, Cubanacán. The size of the hotel is reported variously at 600 to 650 rooms, with Suntime investing up to $150m

One they built earlier: Spanish hospitality group Sol Melia’s Varadero Hotel (Image courtesy of Sol Melia)

A promotional video produced by Cuba to lure Chinese tourists can be seen here.

A number of other resort schemes are in the planning stage.

In June last year it was announced that UK property developer London & Regional plans to invest more than $500m to develop the Carbonera resort at Varadero, about 100km north of Havana. It is thought that the scheme will involve a golf course and more than 1,000 units in the form of villas and condominiums. Bouygues and Odebrecht have been mentioned as possible contractors for the work.

Another Chinese scheme, a five-star hotel and golf course, is being planned by Beijing Enterprises Holdings in Bellomonte, to the east of Havana.

As well as foreign capital, the Cubans are themselves working to expand their hospitality industry. Grupo Gaviota, the commercial arm of the Cuban army, has started a campaign to ready 55 hotels and expand the country’s largest marina, the Gaviota Varadero Marina, to attract the Chinese.

Cuban tourism authorities say they plan to have at least 85,000 hotel rooms available for tourists by 2020.

Top image: A still from Cuba’s promotional video intended to lure Chinese tourists to the island

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